It’s only a matter of time before we drop, or in the best scenario could see a lot of sideways action.
The Ethereum market bounced ever so slightly on Wednesday to show signs of life. The market has continued to consolidate overall, and it looks to me as if the market is trying to figure out whether or not it is in the midst of the basing pattern, or if it is just being extraordinarily noisy. I think given enough time, we are looking at a scenario where we can probably see a bigger move, but the market also has to deal with a lot of volatility due to the fact that the crypto markets have been decimated.
The $1000 level underneath does offer a significant amount of support, so it’ll be interesting to see whether or not we continue to see it show life. The support level runs all the way down to the $900 level, so if we were to break down below there, then I think that the Ethereum market will go looking to the $500 level. Keep in mind that there are a lot of people out there looking at the interest rate situation in the United States and recognizing that there is a severe lack of positive momentum due to the fact that money is going to be so expensive.
If the market were to turn around and break above the $1250 level, we will have to threaten the 50-day EMA. I think it’s going to be difficult to imagine a scenario where we suddenly break out to the upside, so you have plenty of time to get involved in Ethereum. The market will show quite a bit of noisy behavior, and I think that you will have to be cautious with your position size, especially as we are in “crypto winter.” This is a time frame when the market does very little, so I think we are more apt to go sideways and have more of a significant dip in general. That being said, even if we break above the $1250 level, then we could see the 50-day EMA get broken, and then perhaps a move to the $1600 level. Looking at this chart, there’s nothing positive about it, so I think it’s only a matter of time before we drop, or in the best scenario could see a lot of sideways action.